DCF Studio

    VZ · NYQ · Communication Services

    Verizon Communications Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 100.47

    Market price

    USD 45.05

    Implied upside

    +123.0%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Value Per Share

    Perpetuity growth
    USD 100.47+123.0%
    Exit multiple
    USD 59.64+32.4%
    Market price
    USD 45.05

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn12bn23bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 140.3bnUSD 142.9bnUSD 145.7bnUSD 148.6bnUSD 151.7bnUSD 155.0bnUSD 158.5bnUSD 162.2bnUSD 166.2bnUSD 170.3bn+2.2%
    EBITUSD 30.2bnUSD 30.8bnUSD 31.4bnUSD 32.0bnUSD 32.7bnUSD 33.4bnUSD 34.1bnUSD 34.9bnUSD 35.8bnUSD 36.7bn+2.2%
    NOPATUSD 23.9bnUSD 24.3bnUSD 24.8bnUSD 25.3bnUSD 25.8bnUSD 26.4bnUSD 27.0bnUSD 27.6bnUSD 28.3bnUSD 29.0bn+2.2%
    Add depreciation & amortisationUSD 18.3bnUSD 18.7bnUSD 19.0bnUSD 19.4bnUSD 19.8bnUSD 20.2bnUSD 20.7bnUSD 21.2bnUSD 21.7bnUSD 22.2bn+2.2%
    Less capital expenditureUSD -22.4bnUSD -22.8bnUSD -23.3bnUSD -23.8bnUSD -24.3bnUSD -24.8bnUSD -25.4bnUSD -26.0bnUSD -26.6bnUSD -27.3bn+2.2%
    Capex, % of revenue16.0%16.0%16.0%16.0%16.0%16.0%16.0%16.0%16.0%16.0%-
    Less increase in working capitalUSD -276.1mUSD -338.6mUSD -359.9mUSD -382.2mUSD -405.6mUSD -430.0mUSD -455.7mUSD -482.7mUSD -511.0mUSD -540.8m+7.8%
    Free cashflow to firmUSD 19.5bnUSD 19.8bnUSD 20.2bnUSD 20.5bnUSD 21.0bnUSD 21.4bnUSD 21.8bnUSD 22.3bnUSD 22.8bnUSD 23.4bn+2.0%
    Discount factor0.97230.91930.86910.82170.77680.73440.69440.65650.62060.5868-
    Present valueUSD 19.0bnUSD 18.2bnUSD 17.5bnUSD 16.9bnUSD 16.3bnUSD 15.7bnUSD 15.2bnUSD 14.7bnUSD 14.2bnUSD 13.7bn-
    Present Value Of The ForecastUSD 161.3bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.504Reported 0.260, pulled toward 1.0 (Blume)
    Cost of equity7.03%Risk-free + beta x equity risk premium
    Cost of debt5.67%Risk-free + 78bp, the spread for a A rating at 4.4x interest cover. Book interest / average debt was lower, at 3.8%.
    Market capitalisationUSD 186.7bn50.7% of capital
    Total debtUSD 181.6bn49.3% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC5.77%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 100.47

    73% of EV

    Forecast FCFF, final year
    USD 23.4bn
    Capex at depreciation, working capital in reinvestment
    USD 31.7bn
    Less reinvestment at g/ROIC (26.8% of NOPAT)
    USD -8.5bn
    Capitalised
    USD 23.2bn
    ROIC (reported)
    9.3%
    Terminal value, undiscounted
    USD 726.7bn
    Terminal value, discounted
    USD 426.4bn
    Enterprise value
    USD 587.7bn
    Less net debt
    USD 162.6bn
    Equity value
    USD 425.1bn

    Exit at 7.3x EBITDA

    Value per shareUSD 59.64

    61% of EV

    Terminal value, undiscounted
    USD 432.3bn
    Terminal value, discounted
    USD 253.6bn
    Enterprise value
    USD 414.9bn
    Less net debt
    USD 162.6bn
    Equity value
    USD 252.3bn

    Spread between methods: 51%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    3.77%203.81243.06314.10478.681252.47
    4.77%129.42141.87160.29189.73243.19
    5.77%89.9094.35100.47109.18122.18
    6.77%65.4266.7568.6471.2975.05
    7.77%48.7648.7348.8849.2449.92

    Outlined: this model. Green text: above today's price of 45.05. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year0.3%2.1%-3.7%
    EBIT margin22.3%21.5%12.6%
    Discount rate-5.8%8.0%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.